Ogundaisi… Distribution framework still the way to go

If there is anyone in Nigeria’s film industry, who claims he has proposed the right solution that can turn its fortunes around is the producer of Pardonable Unforgiveable, YINKA OGUNDAISI. But he does not understand why government fails to adopt his workable solution but gropes in the dark instead. He spoke with FLORENCE UTOR on some of the issues

When you look at 2017, how did the industry fare at the cinema?
Really, my attitude is to take a global look. Years ago, I went on a study tour of Universal Studios in Los Angeles, U.S., and when we were told to chose the area we wanted to specialise in, I looked at virtually all the areas and they were more or less what we were doing here. The exception was the stunts, like planes blowing up in the air, people running on moving trains, cars colliding and I brought back all that memory with the hope that one day, we also will be there. But today, given the right budget, we can do that. In fact, I have said that if Hollywood and Bollywood were to move here, and we are taken over there, we are certain to perform what they couldn’t and even move. So in terms of technicalities, we are advancing fast. The only regret and why I particularly favour this discussion is that the necessary business structure that will enable the movie industry in particular to realise its full potential is not there and I am really hoping that the relevant authorities will pay attention now.

So technical, we are good, we run level ground anywhere in the world but we still have not got the necessary structure and unless we do, all the key challenges facing the industry such as piracy, accessibility to funds, return on investment will remain.

But producers declared huge sums of money from box office takings. If there is no structure, as you say, how come they made such returns?
Well, let me answer it in two ways. First, I was watching CNN and I saw one of these producers and he was saying, ‘It was the money from his other businesses that he channeled into his production,’ and not the other way round and all his productions still suffered from piracy. Those declaring huge profits, let me just say that the core, the market is not the cinema. On a rough estimate today, we have about 5,000 video producers but we can hardly count up to 50 cinema producers and the danger of using cinema, as the basis, is that it tends to mislead policymakers into thinking that it is okay whereas the majority of Nigerian filmmakers produce directly for homes.

I have been saying this and it is necessary for the new generation of filmmakers to know: cinema is not new to Nigeria! Something happened that put cinema business out. Three key problems that killed cinema in the 1980s was the economic downturn, which made it necessary for an average person to work up to 16 hours a day just to make ends meet and this was not just in the urban areas. If you go to the rural areas, you will see people returning from the farm and still doing one trading or the other.

This structure is still very much with us and I am sure if you take a survey and ask about five of your neighbours the last time they went to the cinema, chances are you may find only one. But ask the five when last they watched a movie on television at home chances are all five would say they have watched. So, I do not want to use the cinema, as basis of saying the industry is making money.

Secondly, the time I was working as a consultant for National Film and Videos Censors Board (NFVCB) under Emeka Mba, we were saying that the only way to verify these huge sums of money producers are claiming is if there is a way of imposing taxes on them and you will see it changing dramatically. So, I will take these declarations with a pinch of salt.

Again, part of the structure I am talking about is that it is not the producers that will say ‘I am making so much.’ The system generates its own information. In Hollywood the studios put their productions in their chain of cinemas; the various video clubs are also under the control of the studios and because of government emphasis on tax, they dare not under-declare what the cinemas are making.

So, you get to know through the trade journal, which even a stark illiterate reads because that is what will give them the A-Z information on what is happening in cinemas. It tells you which film is showing, when and where or how long it’s been showing so you get to know how much each movie is making.

In Bollywood, they even have a landmark. If your film has run consecutively for 25 weeks across the cinemas, you celebrate silver jubilees and there are films that celebrate golden jubilee and diamond jubilee; that means the movie has run for 60 weeks consecutively. I remember the Indian movie Sholay; the producers were skeptical whether it would run or not run and they were on their way to shooting an addendum, when they were stopped and told to go back because there was no need to do an adjustment to the movie.

It is because there is no structure; that is why Nigerian producers can declare huge profits. But when they want to make other films, they still run into the same problem of funding, which they have to provide themselves. Part of the bane of not having necessary structures is that, till date, Nigeria movie system is not part of the organised private sector and you can’t go to the bank and say you want to borrow money. If you want to do so, you pledge a property, not the film. Whereas in Hollywood and Bollywood, your film is the property you pledge and once you are given that loan, the repayment is not by you. It is by the various cinemas showing the movie and the rental clubs paying the bank back. We don’t have that kind of facility.

What about the kind of model that Bank of Industry is operating?
No, what BoI is doing, including NEXIM, is the industrial development funds domiciled with them which would have benefitted a huge chunk of producers if there was this kind of business structure in place. But because there is none and BoI has the responsibility of protecting the funds, they had to come up with their own model of lending, which put emphasis on protection of the money and prompt payment. So in the end, it is not a majority of practitioners that benefit from what BoI is doing but those what can meet the conditions that BoI came up with.

If a structure were in place, BoI wouldn’t even need to give out loan. What they will do is to dispatch the funds into various commercial banks because they are a development bank, not a commercial bank, with their conditions. So, it is those banks that will be responding to the needs of their customers but as a result of no structure, a majority of practitioners cannot access the funds.

Is this business structure different from the distribution structure you have been talking about or is it a new one?
I want a situation where I, as a practitioner, can walk into my bank and tell them I want to make a movie and the bank will accept the movie as a collateral. This is not happening today, not even with the films going to cinemas and declaring huge profits. So, I can be doing my business without worrying about where money is coming from. The loan will be repaid by another set of business structure that the bank and the public know. We don’t have enough cinemas but we have video retailers. In fact, I remember a project I was doing with Gabosky. The bank we went to was willing to lend to the video retailers because it would strengthen their operations but the problem was that the retailers were not reliable. They could be in Ikeja today and tomorrow in Agege. How do you now trace them? So, they refused and that is the core of our problem because Nigeria’s movie industry is incomparable to Hollywood or Bollywood in terms of cinemas. What we have that can be equated to their cinemas is our video retailers and that is the point I have been making.

How do you handle piracy with this structure you insist in the answer to problems in the film industry?
It is all a related problem. First, you need to know that the enabling power of video and censors board empower them to register anybody that wants to go into the business of distribution. It did not specify video or cinemas; it just said for anybody to engage in distribution the person must obtain a license from the video censors board. I have been reading the clamour for the new law but no matter what the new law says, unless the structures are in place, it will not work. I know this from late Biodun Ibitola and her husband. They have always caught pirates and they have always gone to court but successful prosecution is the problem. At a point, the court could not even distinguish between pirated movies and original copies.

Besides, why would a distributor based in Kano be prosecuting a pirate based in Ibadan? What is the locus standi between the producer, who made the movie and the distributor? There is a kind of contract but between the main distributor of a film and those retailers, films are pirated because we do not have the necessary authority, from the guy that the board gave license to distribute the movie.

Now in tackling piracy, we come to the distribution framework. Every nook and cranny should have accredited distributors and the board must demarcate the entire geographical space for those retailers and say, this is your territory, because if you don’t do that, films will be moving anyhow, because it is fluid. So when a retailer buys a movie for distribution, he is buying the right for his territory, which is under him. When he does that, you do not expect that when he puts his money to buy distribution rights, one person will come within that space and be selling pirated movies. It is not possible because the retailer is watching his space.

This framework is not just a question of the board giving licenses; it goes beyond that. You can’t build a house without foundation. The distribution framework is the foundation upon which the business structure I am talking about can stand.

We have the Central Bank of Nigeria, for instance, and there’s the Monetary Policy Committee (MPC). Until that committee meets and takes a decision on interest rate, you cannot see any bank that will wake up and say this is our package. They must await the MPC decision. It is the same way; you cannot have this business structure unless that foundation is laid and the agency to lay that foundation is the censors board and the foundation to be laid is the distribution framework.

The last job I did for Mba at censors board was when CBN announced that it would begin to operate a cashless Nigeria in 2012. Mba asked how we were going to do it and I said let’s find 10,000 retail centres and we divided the whole country into geographical spaces, into 10,000 retail centres and we accredited it. We proposed that Mr. A will be in charge of Agege; Mr. B in charge of Ikeja and so on. Then Mba asked if it would work and I simply said let’s go out.

I boarded a bike and I told the guy to take me to the airport and he said, ‘no,’ that he could only go as far as his territory extends and that I could get another bike from there to take me to my destination. This is with the bike operators. When he saw this, he said, ‘this thing will work because it won’t even be the police and the board running after the pirates anymore; it is the people you have empowered that will do the policing in their areas.’

The idea is not to leave one inch of Nigerian space that is not under an accredited retailer. Once that is done, leave the issue of piracy in their hands.

So, we developed a manual for the retailers. The advantage is that the retailer has the right to retail all the movies in Nigeria and it is only through them that the public can get the movie. If you say a movie must not circulate in your territory and it does, you become the first suspect. Secondly, if you get hint of a pirated movie in your territory, report immediately.

The problem of carving out communities is where we stopped and that is what I have been trying to get the successive administrations to do to complete what we started. And unless this is done there will be no foundation or the regulation of the national or regional framework will not work because the movie will still end up with the unregulated people and that is where piracy is.

Today all the video retailers are the ones selling both the pirated and original videos and this is happening because there is no form of supervision but the way we designed it, the retailers will be registered by the government, not even the board and then put them under the supervision of the local government. So, the money made from them will be shared by the board, the local government and state government.

If the board does not have officials to go to retail centres, state will have. If they don’t, the local government will. And even you as a journalist, you can walk into a retail shop and ask to check their records.

We also went to explain all this to EFCC just to give it the backing I am talking about and the board signed an agreement with them. Anybody caught pirating within the accredited areas will not be treated as a pirate but as an economic saboteur, who is sabotaging the business of a honest Nigerian. Then we went to Mrs. Dupe Adelaja, who was then running SMECON because President Olusegun Obasanjo gave her specific instructions to look into what we were doing. He said at the time, ‘when you get the structure, the government will support it with money but unless there are visible structures otherwise the money will end up with corrupt officials.’

If this framework is as effective as you say, why is it that 10 years after the board is yet to adopt it?
You see, I am the architect of the Distribution Framework and when Mba bought into it, he did so fully. I feel grateful to him since he was not the only government official that I knew at the time. I knew people up to the presidency, but none even wanted me close not to talk of listening to what I had to say. Mba was the only one who said this man has something to offer, despite the pressure put on him to sack me; he kept me.

I am not saying Mba treated me right because my outstanding as a consultant from 2009 till 2012 when he left was not paid. It was when he left that he sent me a text message apologising that we couldn’t do all that we planned to do. But I was loyal to Mba such that his successor did not feel comfortable working with me.

When she came in as the Acting DG after Mba left, Patricia Bala was still soliciting my advice, but as soon as she became the DG, I just saw this wedge. Eventually, she wrote me a letter saying the Distribution Framework is the property of the censors board and by implication the government. So, if I wanted to fight it I should fight the Federal Government and I knew better and I just left. So, I assume that it was on account of my being close to Mba that his successor refused to work with me.

But do you think the model is still feasible in the light of developments in the industry?
Yes, I have been to the board and they said they have made some changes in what I designed and I said, ‘fine, what are these adjustments because when we designed it, we created it into five levels.’ But stakeholders were protesting that after developing Nollywood, why would they give the success of their efforts to an outsider. But Mba pleaded with them that it was for the good of everyone.

During the implementation, the board realised that it did not have enough resources to carry out the five levels. So, we collapsed them into two. Based on the advice that Mba received, the government said we should not harp so much on not having budget, that we should share responsibility. So, instead of the state replicating what federal government had, we let them partner with the Federal Government. We were dispatched to various states to talk to them about how this was going to enable them earn money from movies and we made progress. Oyo even went ahead to sign an MoU with the board.

If you apply logic to what I am saying, according to INEC, there are 120,000 polling units in Nigeria and my argument is, if you make each polling ward a video retailing outlet, all the board needs to do is to invite people from each polling centre to register as the accredited video retailer. They will pay N5,000, which will be used to train them. Even if it is one person that registers per each unit we would have created 120,000 jobs and I am sure there will be more than one from each polling unit and each shop will have a shop assistant. So, imagine the number of jobs already created.

Some banks were ready to give loans to these people to start but they said we should group them into cooperatives so that when they are giving the loans it would not be to individuals but to cooperatives. So that if they default they would hold the cooperatives responsible and not individuals. They also demanded a collateral and one of the biggest and oldest insurance company was ready to give the bank guarantee.

As to how we will make money… If a movie is released today and a retailer is interested in selling it, they will take from the cooperative account and be paying back with their weekly proceeds into the same account they took from. For piracy, let’s even say we have 100,000 retailers, when a movie is released, the number of retailers that say they want the movie will be the only ones to circulate it in their territories. The producers will now know where exactly their movies are retailing and where they are not. How can this not work?